What do M1 and W1 Tax Codes Mean?
Tax codes with a M1 or W1 at the end are used by HMRC to deduct emergency tax from your PAYE income.
Emergency tax codes are usually assigned to your salary by HMRC as a short term measure with the aim of updating your tax code whey they receive more details about your earnings.
M1 is used for monthly pay periods, whilst W1 applies to weekly pay periods. For non-standard payment schedules, your tax code might end with X instead.
Examples of how emergency codes may look:
- 1234L W1
- 1234L M1
- 1234 LX
Both a W1 and M1 tax code is considered “non-cumulative”, which means it doesn’t factor in any tax payments you’ve made during the current tax year.
Income tax being deducted on a non cumulative basis means that your tax is calculated solely on your current period’s earnings rather than your total year-to-date income.
The wrong amount of tax can be taken when you have an emergency tax code. Finding them on your payslip should prompt you to ensure your tax information is up to date on HMRC’s system so you can avoid paying too much tax or too little.
Who gets a M1 or W1 tax code?
Taxpayers with certain circumstances are issued with the emergency W1 or M1 codes. HMRC uses W1 specifically for weekly-paid workers, whereas M1 applies to monthly-paid employees.
Common examples of individuals who can be given an emergency code includes:
- Starting or stopping work part-way through the tax year.
- Working multiple jobs simultaneously.
- Working on a casual basis or as a student during holidays.
- Changing from full-time to part-time employment.
- You are receiving the state pension.
Starting a new job can trigger an emergency code especially if you don’t have a P45 to give to your new job.
If this is the case asking your new employer for a starter checklist to complete is recommended.
A completed starter checklist should give HMRC and your employer enough information to amend your tax code sooner rather than later.
Can you overpay tax with M1 or W1 emergency codes?
Overpaying tax is possible if you’ve had emergency tax deducted and changes to your tax code can actually work in your favour.
If you’ve been overpaying, a code adjustment can trigger an in-year tax refund through your employer’s payroll.
You should always get back overpaid emergency tax the issue is how long it takes to get it refunded.
The personal tax account (PTA) service can be used as a helpful tool to check up on what your current code is and any new ones that have been issued.
If HMRC becomes aware of an underpayment during the tax year, they may adjust your code to collect the extra tax due rather than waiting until the following year.
Contacting HMRC about emergency codes
In theory an emergency code will eventually get updated automatically, but remember you can expedite the process by providing your employer with your P45 or by filling in a starter checklist.
If you suspect your tax code needs intervention you can use HMRC’s online Income Tax checker or by calling 0300 200 3300, but expect wait times especially during busier periods of the tax year.
Tax Rebate Services makes available a tax refund calculator that gives an estimation of tax overpayments. The calculator let’s you check previous tax years so you can assess multiple tax years at the same time.
